Saturday, February 15, 2014

Identity Theft: Proof that Life is not Fair

I spent a weekend fuming over the fact that my credit reports from two bureaus showed a fraudulent collection from Dish Network and several personal information entries that listed names, addresses, and phone numbers on my report that were not mine. There were several possibilities for the entries: 1) The bureaus screwed up; 2) Someone fat-fingered my social security number when providing credit for Dish Network service; 3) Someone had fraudulently used my social security number. No matter how little control I had over the initial event, if I wanted clean credit reports, I knew that no one was going to help me out.

The Dish Network fraud guy insisted to me over the phone that I needed to send in a copy of a police report as proof of identity theft. I thought that was asinine as it was most likely Dish that screwed up my credit. Why is it that I need to go through the effort to correct their mistake? While I would really love to sue Dish just out of principle, I decided that going through its process would be the path of least resistance to correcting the issue. Besides that, I figured that I should have the police report filed in case the credit bureaus resisted my requests to remove the incorrect personal information.

This is where we start to see the kind of impact an identity theft can have on the lower classes. If the next step after receiving the credit reports is to file a police report, you must do that during normal business hours. For example, my town’s police department will only receive complaints from 8 AM to 4 PM during the week. I’m fortunate to have a professional position that allows me the flexibility to handle personal business such as this whenever I need to. When I consider the difficulty the same act would have been for my mother when working two jobs each day to support our family when I was a kid, I get really angry. Even if you’re not culpable for the original incident, since resolving it only benefits you, you’re responsible for fixing it. The bad news is that you just have to find the time to get the problem fixed. The good news is that the immediate steps can be done online or over the phone, often outside of core business hours. Filing the police report can wait a bit until you’re in the best position to take the time.

Taking a half-day on the Monday after I had detected the incident, I headed on over to my town’s police department to file the report. I had with me all of the supporting documentation related to the potential identity theft, including: 1) A completed Identity Theft Affidavit from the U.S. Federal Trade Commission web site; 2) Copies of my problem credit reports with issues highlighted; 3) Proof of residency for the past five years in case I needed to demonstrate some proof that I lived somewhere other than what was listed on my credit report; 4) Drivers License as proof of identity.

Other than collecting all of the documentation and taking time off work, the complaint reporting process was painless. I arrived at the station, explained to the front desk officer that I needed to file an identity theft complaint, and then presented her with the documentation. After asking a few questions to be sure that she understood what she was looking at, the officer made copies of everything that she needed to write the report (proof of residency was unnecessary) and signed my Identity Theft Affidavit. She explained that she would file the report later that afternoon and that I could get a copy from the department’s records office later in the week. I’m sure that each department will handle it differently, so be sure that you understand what the process is before leaving the station. In my case, I was able to submit a request online for the report later in the week. My town police department helpfully responded with the report attached to an email.

Though I didn’t have the police report in hand just yet, I decided to use the remaining time off work to give Experian a call to dispute inaccurate personal information on my report. This is when things really got interesting, and not just because it validated my opinion that this was not an identity theft incident.

I think that the first rule of any credit bureau phone representative is to be as intimidating as possible to get you off of the phone. I spoke to three people in one Experian call. Each one aggressively challenged each statement I made about report inaccuracies. It was like being on trial for being a victim. In each conversation, I had to silently remind myself that I needed these people to help me. So, while I got frustrated with each exchange, I stayed calm and polite throughout the call.

The first Experian representative was unhelpful. After I explained that I had personal information that needed to be removed from my report, she responded with a skeptical, “Have you ever been known by a different name?” When I insisted that none of the information is attributable to me, she explained that she had to elevate me to another representative. Fine, whatever.

While the second wasn’t much more amenable to my explanation, she did offer a piece of very valuable information. When I explained the situation and the Dish Network perspective that this was an identity theft incident, she provided a very constructive response. “I don’t think that this is an identity theft. Usually, when there is an identity theft, we see a lot of negatives records on the report. In your case, I only see one report, and it’s pretty dated.” That was an encouraging sign. She may have been implying that I wasn’t being truthful since my problem didn’t fit an identity theft pattern, but I didn’t get that impression during our conversation. Then, in a statement that provided greater insight into Experian’s process, the representative said, “I’m going to transfer you over to someone in another department that has more tools for researching the problem. When they get on the phone, explain that you may have a ‘merged file’ issue that needs to be resolved.”

Despite their apparent importance in rating the credit worthiness of consumers that likely number in the billions, credit bureaus like Experian are simply data brokers. They receive information from countless sources, often in different forms, and match the data to the correct credit records. But, in industry terms, the bureaus probably receive a lot of “dirty” data, or data that doesn’t match completely. Using complex data cleansing algorithms, the bureaus attempt to bring order to the chaos. But, the data collection process is imperfect. For a simple example, name is an incredibly difficult identifier to get right. One person could reasonably use multiple different names, such as using a nickname versus given name. Not only is my given name, Michael, an incredibly common name, add variations like Mike, Mickey, Miguel, Michel, Mikail, etc., and we have a serious data matching problem. Let’s then suppose that two people with variations on the name Michael have similar last names, say Figueroa and Figaro. This gives you a sense of how difficult it can be just to match names correctly.

In the U.S., credit bureaus also collect Social Security Number (SSN) as another identifying factor. But, combine the common name problem with the fact that the SSN is actually quite predictable (Link retrieved February 16, 2014), and we have a big data cleansing problem. Though “unique,” the SSN is commonly assigned based on regional location and age of the person that it’s assigned to. With an incredibly common given name, a common Latin surname with many variants, and a SSN origination centered in a region of the U.S. that has a high concentration of Latin Americans, it wouldn’t be a stretch to argue that the credit bureaus could mistake me for another person. Looking back at my Experian credit report, I can now see enough information similarity to see how the data cleansing process merged some of our information together. It provides a hint at how ridiculous the financial industry identity verification process likely is.

Wow. All of the sudden, my whole perception of what caused this problem shifted. Could Experian have caused this whole problem by improperly cleaning the data that it received? Whatever the answer, I still had to get the problem fixed. This one incident may not actually be an identity theft, but the resolution process remains the same. My next post will highlight a surprising new piece of information contained deep within my Experian credit report and I’ll discuss how the report complexity discourages consumer fraud detection.

Time spent so far: 9 hours.
Cost: $0

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